Every real estate transaction ends in a settlement session where the buyer and the seller of a particular piece of real property conclude all financial arrangements pertinent to the sales transaction. Typically, relatively large amounts of money are involved, particularly when the real property is a commercial property. In addition, monies must typically be disbursed to multiple payees. Many of these multiple disbursements must be timely made in accordance with one or more statutes or other operating regulations. When large dollar amounts are involved, the interest incurred on a daily basis makes swift transfer and depositing of funds desirable.
Presently, real property settlement involves many manual steps. While tools (including software or other computer-based tools) exist to help perform individual settlement steps, many manual operations such as data entry leave numerous possibilities for innocent error. Resolution of even such innocent errors may result in great expenses to the party or parties responsible for the settlement transactions. Also, much time may be expended in resolving such errors. Embarrassing situations such as insufficient funds in a fiduciary account result in lost revenues and possible penalties. Because no coherent systems exist to detect errors in substantially real time, it may be days or weeks before the error is discovered. As is true in any error recovery situation, the more time that passes between the occurrence of the error and attempts to rectify it, the more difficult and time consuming the task becomes.
Current systems, in addition to being highly prone to innocent errors, also afford numerous opportunities for fraud. Detecting fraud is often more difficult than uncovering innocent errors in that the perpetrator of the fraud may take steps to mask his or her actions. Fraud currently costs practitioners in the real estate settlement industry millions of dollars per year.